For the past two months thereabouts, the memecoin market has enjoyed a flourishing bullish season. However, data from the analytics platform Kaiko reveals that the bull run will likely end as trading volume reduces by as much as $500 million.
What Are Memecoins?
Memecoins are digital cryptocurrencies that are created for fun. They often have no utility or use case. These currencies’ value is highly volatile and dependent on hype in social media apps like Twitter.
Popular among this class of digital assets are Dogecoin, Shiba Inu, PEPE, FLOKI, and many more.
Memecoin’s Trading Volume Drops by $500 Million
As is common in the memecoin market, traders have committed themselves to a ‘take profit’ scheme, extracting gains and leaving the asset’s price to suffer from mass withdrawals.
Source: Kaiko
According to the chart shown above, a significant rise in the memecoin frenzy began at the start of April 3rd. That day, Twitter CEO Elon Musk replaced the blue bird-themed logo with Shiba Inu’s dog-themed logo. While Musk has been known to promote Dogecoin in the past, the move he made quickly sparked a lot of traction for memecoins. Dogecoin rose rapidly by 30%.
Around that time, memecoins recorded nearly $1.5 billion in daily trading volume. Over the following weeks, attention was shifted to the PEPE token, a frog-themed token named after the popular internet meme and cartoon character Pepe the Frog.
On May 5th, PEPE and FLOKI were listed on the leading cryptocurrency exchange Binance. This was immediately followed by a surge in PEPE’s value by 66%. The daily trading volume of the asset also rose above $1 billion, as shown in the chart above. Currently, PEPE’s value has dropped by as much as 25% within the past 24 hours.
Although these uptrends are beginning to die down, time will tell if the hype around memecoins will once again rise significantly above $500 million.
